American Eagle Beats Estimates but Shares Fall on Outlook

American Eagle Outfitters reported second-quarter earnings and revenue that topped analyst expectations, but its shares fell sharply after the company maintained a cautious outlook and investors questioned how much of the profit improvement came from one-time tariff refunds. The results, released after markets closed on Wednesday, September 9, showed earnings per diluted share of 79 cents, well above the consensus estimate of roughly 22 cents, on revenue of $1.38 billion, up 7.5 to 8 percent year over year and slightly ahead of forecasts of $1.37 billion. Comparable sales rose 6 percent, driven by a 19 percent increase at the Aerie brand, which offset a 1 percent decline at the namesake American Eagle banner. Aerie sales totaled $536 million, up 25 percent, with strength across apparel, intimates and activewear. Gross profit climbed 34 percent to $672 million, helped by tariff refunds that produced a net benefit reported at $179 million, with the company having received $196 million in refunds during the quarter. Net earnings rose 73 percent to $134.1 million. Inventory at cost increased 14 percent, reflecting incremental tariffs, while units rose 9 percent.